Peers plea for FSA to regulate claim chasers

Peers working on the Compensation Bill are to meet Treasury Economic Secretary Ivan Lewis in a bid to persuade him that the FSA is the best body to regulate claim management firms rather than the Claims Standards Council, the Law Society or a new body.

Tory peer Lord Hunt of Wirral says the amendments he put forward in the House of the Lords last week, such as capital adequacy requirements, need for PI cover, assessing competence of authorised persons and governing marketing methods fit in well with the FSA’s role. The FSA is not thought to be interested in taking on the extra workload.

The amendments were accepted in principle by Government spokeswoman for constitutional affairs in the Lords, Baroness Ashton of Upholland, who also made it clear that any compensation scheme would be funded by a levy on authorised persons.

Regulation could be implemented by October. Lord Hunt is calling on the process to be speeded up, with the potential for interim regulation if it takes too long.

He says: “I will be meeting with Ivan Lewis to press the case for the FSA to regulate these firms. Something needs to be done as soon as possible to stop the injustice and extreme abuses of the system and the FSA seems the obvious choice to hold them to account.”

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